Managing Community Benefits in Turbulent Times

John A. GaleResearch Associate

Maine Rural Health Research Center

NRHA CAH Conference

Portland, OR

Oct. 9, 2009

Overview of Presentation

• Explore ways in which CAHs can strategically manage their

community benefit to maximize services to vulnerable

residents during turbulent times

• Understand community needs and the role of the needs

assessment

• Manage charity care demands

• Target unmet community needs

OHRP’s Vision for Flex

• Support the development of collaborative community-based

rural health delivery systems with Critical Access Hospitals

(CAHs) as the hubs of those systems of care and

• Encourage CAHs to undertake collaborative efforts to

address unmet community health and health systems needs

and/or improve the health status of their communities

Community Expectations

• Not-for-profit and public CAHs are accountable to their

communities

• Pressure to respond to community needs

• Limited resources requires strategic thinking

• Economic downturn affects the needs of populations most

at risk such as the working poor or the chronically ill

– Lack of or reduced access to primary care, medications, preventive

services and elective procedures

– Greater demand on emergency rooms and hospitals due to reduced

access

Community Benefit

• A planned and managed approach to meeting indentified

community needs

• Catholic Health Association framework - de facto standard

• The definition implies collaboration with a “community” to

“benefit” its residents with special emphasis on improving

the health status of vulnerable, underserved populations

Community Benefit Activities

• Resulting from patient care activities

– Charity care and government health care program shortfalls

• Community-focused activities

– Community Health Improvement Services

– Health Professions Education

– Subsidized Health Services

– Research

– Financial and In-Kind Contributions

– Community-Building Activities

– Community Benefit Operations

Evidence Needed to Support Community Benefits

• Community need

• Improved access to services

• Enhanced population health

• Advancement of knowledge

• Charitable purposes

Identifying Community Need

• 48% CAHs conducted a formal community needs assessment

in the last 3 years (2007 FMT Survey of CAHs)

• 66% have a formal planning process to address hospital and

community needs

• Key issues:

– It is not enough that staff and board reside in community and are

familiar with local needs - must reach out to vulnerable populations and

ask what their needs are

– Needs and populations change – needs assessments should be done

every 3 years or so

Benefits

• Provides valuable market and community data to build

programs

• A window to unmet needs

• Guide to targeting limited resources and maximizing impact

• Vehicle for strengthening important community relationships

Community Needs Assessment Process

• Establish assessment infrastructure

• Define purpose and scope

• Collect and analyze data

• Select priorities

• Document and communicate results

• Plan for action and monitor progress

Available Tools

• Association for Community Health Improvement’ Community

Health Assessment Toolkit

– www.assesstoolkit.org

– Available to members of the AHA, Association for Community Health

Improvement, and Society for Healthcare Strategy and Market

Development

• National Association of County and City Health Officials’

MAPP process

– www.nacho.org/mapp

– Used by many health departments in conjunction with hospitals

Examples

• Regional Medical Center

– Organized around 10 core areas of Iowa’s Health People 2010 criteria

– Each committee had 6 to 9 community representatives

– Hospital provided subtle leadership behind the scene

– Increased trust and collaboration among community agencies

• Littleton Regional Hospital

– Collaborative process between LRH, Ammonoosuc Community Health

Services, and North Country Home Health and Hospice

– Conducts a joint community needs assessment every two years

– Prepared by North Country Health Consortium

Options for Controlling Costs

• Use one of the previously mentioned tool kits

• Collaborate and share costs across community providers

• Define data needs carefully, use secondary data whenever

possible, minimize original data collection

• Identify college programs in community or public health as a

resource – use students if possible

• Train and use local residents for some data collection tasks

• Identify and build of strengths of members of assessment team

• Use student interns to assist with project coordination and tasks

Charity Care Activities

• Charity and uncompensated care

– 99% offer financial assistance to patients.

– 87% offer both charity care and discounted charges

– 1/3 base eligibility at 100-200% of Federal Poverty Levels. 1/4 use

higher income eligibility levels

• Key Issues:

– Having a policy is not enough – it must be promoted and implemented

well to reduce barriers to access and serve those with the greatest needs

– Many CAHs (and other hospitals) cannot adequately distinguish

between charity/uncompensated care and bad debt – you can’t manage

what you can’t quantify

Tracking Charity Care

• Hospitals vary in the extent to which they track charity care,

other forms of uncompensated care, and bad debt separately

• What should be counted:

– The costs of charity and discounted care provided to individuals who

qualify under the hospital’s charity care policy

– Costs of care provided to enrollees in Medicaid and other means-tested

government programs not covered by revenues

• The IRS is collecting data on Medicare shortfalls and bad debt and

asking hospitals to explain why some portion might be considered a

community benefit

• Contractual adjustments for commercial insurances should not be

counted

Bad Debt

• Hospitals report that significant portions of their bad debt is

really charity care that has not been verified

• This is likely true for most hospitals for a number of reasons

• Sometimes patients do not complete charity care forms or

submit necessary documentations

• More often, the system does not collect the information needed

to make the determination at the time of service

• Administrative resources are consumed trying to collect money

that cannot be paid and ill will is created in the community

Charity Care and Billing Policies

• Evaluate charity care policies

• Recommendations

– Simplify charity care qualification procedures and promote them widely

– Align charges to the uninsured to Medicare or managed care rates

– Make information on charity care available at the start of care

– Ensure that all staff are knowledgeable about charity care policies

– Manage the charity care process

– Comply with national standards on billing

o AHA’s Statement of Principles and Guidelines on Hospital Billing and Collection

Practices or HFMA’ Patient Friendly Billing Project

o HFMA’s P&PB Statement 15: Valuation and Financial Statement Presentation of

Charity Care and Bad Debts by Institutional Healthcare Providers

Managing Charity Care

• Revised policies – loosen eligibility process

• Enrollment – support/assist patients to enroll in public

programs

• Humane collection effort

• Understand demand – who is using charity/free care and

amounts provided

• Reduce inappropriate classification of charity care as bad debt

• Approach philanthropic organizations to support charity care

• Promote patient accountability

• Implement well-designed demonstration

Example

• Weiser Memorial Hospital’s Washington/Adams County

Health Action Team

• Provides primary care to uninsured individuals over 18 with

incomes of less than 150% of FPL

• 18 participating community organizations in three towns

• Rationalizes delivery of charity/discounted care

• Removes burden from individual providers

• Maintains patient dignity

• Minimizes unnecessary collection activity

Community Activities

• Prevention and health improvement

– Nearly all offer some combination of health education, preventive

screenings, clinical preventive services, and support services

• Enhancing community health system capacity

– CAHs provide financial and other support to community health care

providers including primary care providers (46%), FQHCs (29%),

LTC (40%), mental health (31%), EMS (34%)

• Key issues:

– Many are marketing or legacy activities

– May not be connected to current needs

Target Priority Issues

• Base activities on a current needs assessment

• Review utilization data and base initiatives around the data

• Focus on expanding access to care and vulnerable populations

• Engage board, staff, docs, clinicians, and community

• Establish leadership and accountability

• Work collaboratively to identify priorities and solutions

• Plan, manage, and measure

• Establish business case for program where possible

– Value to the community

– Reduction in local health care delivery costs

Examples

• Regional Medical Center

• Established an extensive array of mental and behavioral health

services serving multiple counties through the Backbone Area

Counseling Center including:– Outpatient psychotherapy and counseling

– Evaluation services

– Emergency and crisis care

– Supported community living

– Intensive outpatient services, and child day treatment

– Psychiatric services

– psychological testing

Examples

• Springfield Hospital

• Based on 2004 needs assessment identified following

priorities: Decrease obesity, substance abuse rates, mental

illness and depression

• Expanded chronic disease initiative

• Increased resources for child psychiatry and treatment

• Improved integration of primary care and mental health

• Sought grant funding to develop chronic care services

• Maintains psychiatric DPU

Summary

• Increasing attention will be paid to community activities of

hospitals

• Movement to establish standards for charity care and

community benefit activities

• Many CAHs are already addressing community needs but not

necessarily in a strategic systematic fashion

• Focus on evidence-based strategies

• Promote “best and promising practices” of CAHs as they

address community needs

Contact Information

• John A. Gale, M.S., Research Associate

Maine Rural Health Research Center

University of Southern Maine

207-228-8246

jgale@usm.maine.edu